An independent parole board will be tasked with determining whether offenders convicted of federal crimes can re-enter the community, replacing the government as decision-maker.
Attorney-General Michelle Rowland has introduced draft laws to federal parliament that would set up a parole board for those found guilty of commonwealth crimes such as terrorism, drug importation and online child abuse.
State and territory parole boards will remain in place for other offenders, with the new board expected to be up and running in the second half of 2026.
The body would consult experts including from law enforcement, corrections, victims of crime and safety advocates and psychologists.
Ms Rowland said the federal parole board was needed due to the number of case decisions for commonwealth offences rising each year.
There are 1200 prisoners who have committed commonwealth offences, she told parliament while introducing the legislation on Wednesday.
More than 530 federal parole or related decisions were made in 2024 and 2025, with the number increasing between five and 15 per cent per year.
"This cohort now includes increasing numbers of offenders who pose a direct risk to community safety, such as terrorists and child sex offenders," she said.
She said the board will ensure decisions about the release and management of Commonwealth offenders are made by experts with experience in an offender's prospects of rehabilitation and reintegration, and the risks they pose to community safety.
The Law Council of Australia said the board would protect prisoner's rights in having the application for release considered transparently, without politics.
"The Commonwealth is currently the only jurisdiction in Australia where elected officials make primary decisions about parole," the council's president Juliana Warner said in a statement.
"One key reason we have been a long-term supporter of a federal parole authority is because it will address the risk of perceived political interference in parole decisions."
To prevent government interference, Ms Rowland said the bill explicitly states the board is not subject to direction from anyone in performing or exercising its functions.
"The bill ensures that only the Governor-General can terminate members of the board, and only for serious matters including misbehaviour, incapacity, bankruptcy and extended unexplained absence," Ms Rowland said.
"This further enshrines the independence of board members and limits political interference in their tenure."
A legislative review will take place three years after the board begins operating.
